Sunday, December 06, 2009

My Philosophical Difficulties with the Marcellus Shale Deposit

Welcome to "The Gods Are Bored," hosted by an expatriate Appalachian named Anne Johnson. Anne Johnson is my real name. What it lacks in originality is more than compensated for by its fabulous properties of anonymity. I am me, and we are many, and go ahead and Google, try to pick me out from the crowd!

It has long been known that a supply of natural gas exists deep beneath the mountains of Pennsylvania, Maryland, and northern West Virginia. This gas is trapped in a kind of rock layer called Marcellus shale. Recently, engineers have perfected a means of extracting the gas by blasting water through horizontal drills that are somehow plunged deep beneath the mountains' surfaces.

Several things have happened as a result of this little jump in drilling technology:

1. People who own piece-a-nothin' farms overtop the Marcellus Shale Deposit could be potential Jed Clampitts and are already being lured by big-money energy companies.

2. Those big-money energy companies (think Dick Cheney) are trying to do what they do best -- circumvent paying out dough to property owners and low-balling what they do give in compensation.

3. Environmentalists are debating the pros and cons of getting clean energy (natural gas) by doing more mountain-rape, which brings us to the debate that...

4. Drilling for gas beats mountaintop removal mining for coal and brings a similar payoff: energy from a domestic source.

My granddad had a natural gas lease on our 75-acre farm. The farm sits on top of Marcellus shale.

My uncle, who has lived on the farm for the past 25 years, canceled the gas lease long ago.

The farm could go up for sale shortly. I own a share of it, but so do several cousins who are strapped for cash. My sister also has a share in the place, and she wants to sell. I would like to keep the farm, but with two kids to educate and a house in New Jersey, I can't afford to buy a second property -- even though I would only have to pay 5/6 of the agreed-upon price.

Usually I can get a grip on issues pretty quickly, but this Marcellus shale thing has me all at sixes and sevens. Does the gas beneath my mountain make the property more valuable? How would I feel if the Cheney trucks came roaring in and started to drill, baby, drill? Would I rather keep the farm in the family, and reap the potential Clampitt windfall, or sell to some speculator? How much respect do I have for the beauty and purity of my mountain? What happens if my neighbors have differing opinions and open their properties to the Cheney drillers?

It's times like this when one needs a bored god's advice. And who knows the underworld better than Hades? So today I put in a call, and it happened that He wasn't too busy (imagine that!). Here he comes now, trailing a little fire-and-brimstone that smells like Retsina. Please give a wild, warm, wonderful TGAB welcome to Hades, Greek God of the Underworld!

Anne: Welcome, God of the Underworld! How are things down below?

Hades: Oh, man, I'm stoked. Stoked! Yowsa! I've got Tiger Woods!

Anne: You mean Tiger Woods is dead? I didn't see that on the news.

Hades: Not yet. But when he dies, I get him! Turns out he's a cheetah, not a tiger! (Laughs)

Anne: Oh, for the love of fruit flies! I didn't invite you hear to listen to bad puns. I have a serious philosophical issue to discuss with Someone who knows the inside of the Earth.

Hades: I'll show him a thing or two about golf.

Anne: Now. Let's go over this whole Marcellus Shale Deposit thing. Where does the deposit lie in relation to Your kingdom?

Hades: Every time he tees up, I'll melt his irons right out from under him.

Anne: Could we please not talk about Tiger Woods?

Hades: Hey. This is a big catch for me. I've never gotten over missing out on Lou Gehrig.

Anne: You've gotta have a hundred thousand top-quality athletes in your collection, Hades. Not to stereotype or anything, but they're kind of a randy lot.

Hades: Yes, and golfers are no exception. But Tiger. Tiger! Huge acquisition. Huge.

Anne: Just for a moment can You give me some insight on the Marcellus Shale Deposit?

Hades: This also gives me all his concubines. More cuties to keep me warm in the wintertime!

Anne: You know what, Hades? You're not the first bored god I've interviewed from the ancient Greek and Roman pantheons. And to be quite blunt, I can see why it was easy for Christianity to get a toehold in those cultures. You Greek deities all seem to have such flagrant human failings. Try to be serious for two seconds! Please!

Hades: I am serious. I'm a collector. Don't you get excited when you get a valuable new item for your collection?

Anne: I don't collect anything except memories.

Hades: Boooorrrrring! You should collect something! I suggest stamps. You don't have to be rich to own a first-class stamp collection.

Anne: You know what, Hades? I just remembered. I'm alive. And I have a lot to do today. Look! Watch me move around, shoving the socks into the sock drawer! La di dah. Oh, it's great to be alive, with a wonderful new memory of dancing in the snow with the Spare, in the parking lot of the thrift store in Pennsauken...

Hades: I'll be back for you some day.

Anne: No you won't. I'm booked with another carrier. Thank goodness. Because it truly would be hell to spend eternity watching Tiger Woods try to play golf with molten putters.

Well, readers, you never know what you'll get when you ask a bored god for an interview. Sometimes they help, sometimes they advise you to start a stamp collection. As always I'm open to your suggestions for a serious bored deity to which I can pose my ethical questions on the Marcellus Shale Deposit conundrum. Also, if you are reading this, and you have a personal opinion on the issue, I sure would like to hear that too. Even if you can spell "shale" and do nothing else, you'll offer me more than Hades just did.

The process of hydraulic fracturing that is used to fracture Marcellus shale poses great hazards to groundwater and health. If you have not seen it, I suggests watching a film called split Estate" www.splitestate.comSome other sources are http://drillingsantafe.blogspot.com/http://sites.google.com/site/northernnmconservationproject/homeThe conservation project has a page of informative links. You should be able to find out everything you never wanted to know about oil and gas drilling from the sites listed there.I have this feeling that Hades is a big fan of that damn Marcellus Shale...

holy shit!...who knew Hades was a horder...I don't think you will have a choice..if ucle sells you have to go along..because if you don't everyone in the family that has a shot at some money out of the sale will make your life miserable...just saying

Much of your decision lies in what the laws are in your state/county regarding a term called "compulsive integration". In some places, if a certain percentage of your neighbors lease their land to the gas companies, then you will be FORCED into leasing your property whether you want to or not. So first you need to really get a bead on what the laws are in your areas and what your neighbors will be doing, so it doesn't interfere with whatever decision you make.

That said, the laws are also in play when damage to the environment happens on your leased property. If you don't have certain protections built into the leasing language, then you may be liable if an explosion happens and your gas well causes some kind of damage to others property, drinking water, etc. Then all that leasing money you got will be going towards lawyers and paying for damages.

Other problems with gas leases aside from the obvious environmental ones like noise, and pollution, is the fact that the landsmen that come around to lease are not the people that will be doing the actual drilling, and they will promise you the world with one hand as they slide all kinds of goodies for the drilling company into the lease with the other. Also, you will not be able to sell the property as long as there is a gas well on it. Mortgage companies will not offer loans on leased property. If your property is damaged by the well, it will be nearly impossible to sell it, and any money you get for the lease may not pay the taxes on the property for the next 20 years if you can't unload it. Just like any other business transaction, you are best off hiring a lawyer, or at least finding a leasing coalition to help you understand these and many other problems.

As far as the environmental aspects of gas drilling, they are not pretty, and more information is coming in every day from places like Dimock Pa, where people's drinking water was ruined by gas drilling. More links and information about this is available on my blog.

Just remember that the gas industry is not here to help you, they are just here to get the gas, make $$$ and get out. They have no vested interest in the area, or in the residents down the road. If YOU do, then THAT should be the primary force in whatever decision you make. Good Luck.

I would google around for a landowners group in an area where the property is. They probably already have free legal representation. google marcellus shale landowners group maybe.

Anyway, perhaps you and your family can do a 5 yr mineral rights lease and use that money to keep the farm in the family and your cousins would get some $ that they need.

Around me farmland is selling for about $2000 / acre but some leases are going up to $5000 / acre plus 20% royalties if they do drill. So you and your family would be better off leasing the mineral rights for the next 5 years and keeping the farm in the family than selling it right now.

sell the farm: $2000 x 75 acres=$150,000

lease your mineral rights for 5 years: $5000 x 75 acres=$375,000 and you still own the farm right?